Energy and Climate Change An EU Perspective: The Power Industry

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Energy and Climate ChangeAn EU Perspective The
Power Industrys ViewNHO/IOE, Oslo, 18
September, 2008

• Bengt Magnusson
• Editor in Chief and
• European Correspondent
• Swedenergy ERA Magazine

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Industrys Face/Voice in EU
Representing the European Electricity Industry
at Expert, Strategic and Policy-making Level
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EURELECTRIC members
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Piebalgs-Barroso-Dimas, 10/1/07
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Neelie Kroes, 10/1/07
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Useful Background 1

• A Green Paper for a Common Energy Policy
  presented in March 2006.
• Action Plan Energy Efficiency launched 19 Oct
  06. The Rest 10 Jan 07.
• Big Day EU Climate Action and Renewable Energy
  Package, 23 Jan 08.
• Proactive Energy Commissioner,
  Andris Piebalgs

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Useful Background 2

• Common Energy Market.
• Energy Supply - solidarity between Member
  Countries.
• Diversified energy mix up to every country
  (subsidiarity).
• Proactive Climate Action energy efficiency
• Strategic plan - EU world leader in energy
  technology.
• A Common external energy policy.

Competitiveness
Env/ Climate
Secure energy supply
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Useful Background 3

• High(er) electricity prices, heated discussions
  in the electricity intensive industry all over
  Europe. Ukraine, Georgia Sec of Supply.
• Climate issues and emissions rights trading
  (ETS) hot, hot!
• Climate/energy Currently has the Very Highest
  Priority within the EU!

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EC Basic Proposals 1 (20-20-20)23 January
2008

• 20 reduction of GHGs within EU by 2020
  (compared to 1990).
• Binding targets of 20 renewable energy by 2020.
• Energy Efficiency 20 according to Action Plan
  of 19 October 2006.
• Ownership unbundling is the objective for the
  electricity supply side (not possible in the
  gas business).
• Co-operation between regulators.

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EC Basic Proposals 2

• Yr 2015 at least 12 demonstration plants testing
  CCS (Schwarze Pumpe pilot in Germany open now).
• Yr 2020 all new coal-fuelled plants have got
  CCS.
• Liberalisation of electricity and gas markets
  continues.
• Treaty/deal with Russia (Energy Charter) When??

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EC Basic Proposals 3

• Common technical standards for cross country
  power trading, more effective and better
  co-operation among TSOs
• ETSO gtgtgt ENTSO-E encourage more transmission
  links, 5 yrs planning and approval - at most 10
  acc to EC.
• Focus on and better financing of RDD cf.
  SmartGrids, highlighted in a current IEA-project
  (Enard).

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Market integration must accelerate, we say

• The first packages brought progress, focusing on
  the national level. Regional markets must now be
  promoted a necessary step to one EU
  market.
• The most efficient way to deliver market
  integration is via system operation grid
  investment at regional level.
• The 3rd package should facilitate regional
  integration of network operators. Regulators
  TSOs should have a duty to promote market
  integration.

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EC Concentration in European electricity markets
Norway, Finland, Denmark, Sweden NORDEL
folds France, Germany, Benelux Northwest
Europe Cooperation established Power exchanges
(Bourses) plentiful! NordPool ASA, et al.
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The road towards an integrated electricity
EU-market
Integration at European level
Pan-European market
2007-12
Coordination between regions
2005-10
Development within regions
2005-09
Continued liberalisation of national markets
2005-07
Source Integrating Electricity Markets through
Wholesale Markets EURELECTRIC Road Map to a
Pan-European Market (June 2005)
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How to deliver?

• The best way for the EU to deliver on climate
  while offering competitive power supply is
  through
• A COMPETITIVE, INTEGRATED
• POWER MARKET ACROSS EUROPE

Third package and climate/energy package must
both facilitate trade drive integration!
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Key to cost-effectiveness Synergies between
supply and demand
Efficient use of electricity and new
electrotechnologies
Low-carbon supply of electricity
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Age span in electricity generation, old EU15
140
120
100
80
Oil
GW
Gas
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Coal
Nuclear
40
20
0
lt 10 years
10 - 20 years
20 30 years
gt 30 years
Europes generation fleet ages half of todays
capacity most of it coal fired is probably
terminated by 2030.
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Prognosis EU 2020 Renewable electricity

Source EC
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Role-play, co-habitation/operation
according to EC proposal
EU COM
ACER
ENTSO
Monitor and examine
National Regulatory Bodies
National System Operators
Source Svenska Kraftnät
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The Future
Erik, 5 months old, your future energy customer
or boss
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Energy now a climate issue!
Sir Nicholas Stern.
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Climate now an energy issue!
Conti, Enel, Josefsson, Vattenfall, Barroso, EC.
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Extra curriculum Who is this?
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Right, the Energy Minister of India!

• His name is Sushilkumar Shinde.
• At the WEC congress in Rome last November he
  pointed to the fact that his country has got 600
  million people with no or very small access to
  electricity. In the EU we are 450 million
• Clean energy must be supported, but market
  solutions will hardly make the trick, says
  Shinde.

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India one billion people

• - Our priority is to supply our people with
  electricity, and the RES are not sufficient here.
  Its simply necessary to go for fossil fuels,
  too, says Shinde.
• And China has almost as many inhabitants as India

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Thank you for your attention!

• bengt.magnusson_at_era.se
• 0708 672 771
• Svensk Energi-Swedenergy-AB /Tidskriften ERA
  
• SE-101 53 Stockholm,
• and
• Rue du Luxembourg 3,
  B-1000 Brussels
• www.era.se